Gift Nifty Signals Negative Opening for Indian Equities Amid Global Cues and Q2 Earnings

Indian stock markets are likely to open on a negative note on Thursday, despite the US Federal Reserve holding interest rates steady overnight. The Gift Nifty trading at 22,660 signals a gap-down opening of about 100 points for the Nifty.

Analysts expect the broader market to remain volatile, though stock-specific action is anticipated to continue on the back of ongoing second-quarter (Q2) results. Several companies are scheduled to declare their Q2 performance, including ARCIL, Asian Paints, Ambuja Cements, Coal India, Equitas Small Finance Bank, ESAF Small Finance Bank, Godrej Consumer Products, IEX, Milky Mist Dairy Food, Motilal Oswal Financial Services, and Suzlon Energy.

On Wall Street, equities ended modestly higher following the Federal Reserve’s policy decision. Strong earnings from a major South Korean chipmaker also lifted sentiment across Asian technology stocks. However, U.S. equity futures edged lower as investors weighed mixed results from megacap companies, leaving global cues for domestic markets somewhat uneven, noted Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.

Thomas Priju, Portfolio Manager at Karma Capital, remarked that the US Federal Reserve keeping interest rates unchanged at 3.75 to 4 percent is not necessarily a dovish signal for global equity markets. Pointing to the 10–2 vote where two policymakers favored a 25-basis-point hike, he highlighted the divergence within the committee as inflation remains elevated. Priju stated that the Fed’s assessment and the possibility of further rate hikes suggest the pause should not be interpreted as the end of the tightening cycle, with markets increasingly pricing in another rate hike in December.

Addressing the implications for Indian equities, Priju noted that further increases in US interest rates could keep US bond yields and the dollar elevated, putting pressure on emerging-market capital flows and increasing volatility in the Nifty. High-valuation stocks and segments dependent on foreign portfolio flows could remain particularly sensitive to these changes in global liquidity conditions.

He added that the overall impact on Indian markets will also depend on domestic earnings growth, valuations, and the trajectory of foreign investor flows. Investors have been advised to remain selective and focus on companies with strong earnings visibility and balance sheets, while monitoring US inflation data and subsequent Fed communications.

Meanwhile, Asian markets traded higher in early deals, with both the Nikkei 225 and South Korea’s KOSPI gaining over 0.5 percent. However, Enrich Money CEO Ponmudi R observed that despite these positive regional cues, elevated crude prices and ongoing geopolitical uncertainties are likely to limit the scope for a sustained upward move in domestic markets.

"Market fluctuations driven by global monetary policies and domestic earnings cycles require founders and investors to maintain a disciplined approach to capital allocation. While macro headwinds such as elevated crude prices and potential interest rate hikes can increase volatility, companies with solid balance sheets and clear earnings visibility remain resilient. Stakeholders should focus on fundamental performance rather than short-term market movements." — Dr. Shishir Gupta, Founder & CEO, StartupLanes